The Institute consists of a keynote address, a session on intellectual property rights and issues, and four sessions of individual country reports. The countries covered are: China, Korea, Taiwan, Hong Kong, Singapore, the Philippines, Vietnam, Thailand, Indonesia, and Malaysia. Proceedings have been published in 1996.

SESSION REPORTS:

Keynote:
East Asia: A survey of political and economic issues 1945-1995
The Honorable Ronal Palmer
Professor & Diplomatic Consultant
George Washington University

Southeast Asian countries have gone through many major political changes in the past fifty years. First the Nationalism or anti-Colonialism movement in many of these Southeast Asian countries led to their independence at the end of the World War II. Between 1945 and 1965, Communism swept through the region.

Today, the region is more peaceful than it has ever been since the 19th century, and its economy has experienced tremendous economic growth since 1970. The region's economic development has three distinctive characteristics: (1) dynamism (so much is done for so many in such a short time), (2) size (the region's economy reaches 7 trillion in 1992, surpassing that of the European community), and (3) integration (ASEAN has pulled countries of great diversity into a more integrated economy). The World Bank forecasts that by the year 2020, seven out of the ten top world trade markets will be Asian countries, and China will once again lead the world economy as the "Middle Kingdom".

The concept of intellectual property is nonexistent in the East Asian countries. China has the most severe problems regarding intellectual property (IP) issues. Malaysia, like many other Asian countries, has video/audio cassette piracy problems. The Philippines has copyright problems as well as computer software, laser disc, movie piracy problems. Taiwan was considered the piracy kingdom for a long time, but it is going through significant changes toward the regulation of copyright laws.

In the U.S. law, the Trade Act of 1974 in which Sec. 301 provides the criteria through which the United States trade representative will act on behalf of the individual industry to handle foreign piracy issues. In 1988 a so-called telecommunication 301 was added to Special 301 that linked international property with the trade. According to Special 301, U.S. Trade representatives shall issue a trade report by March each year, issuing warnings against other countries concerning trade disputes. U.S. is using bilateral and multilateral approaches in dealing with IP problems .

Information marketing, information technology and economic development in ...
Hong Kong and China

John Urne
Director of the Telecommunications Research Project
Center of Asian Studies
University of Hong Kong

Hong Kong:

Hong Kong is a teleport and a telecom hub for China, and is also a center of business as well as a distribution hub in the Southeast region. This status has to remain true after 1997. Otherwise, both Hong Kong and China will suffer.

The Information Technology infrastructure makes Hong Kong very competitive in the region. Its excellent telecom infrastructure and financial service are the two most important reasons of locating business in Hong Kong. Eighty percent of central office switches are digital. Hong Kong has 600,000 mobile cellular users (10% of total population), 1,4 million pager users, and over 20 Internet providers. Over 27% household has personal computer and 6% has Internet access. Wireless technology is very hot. Video-on-demand service, home banking, and home shopping over the cable TV are on the way. In fact, Hong Kong has the most cable and satellite dishes at the lowest prices in Southeast Asia.

In the information services market there are service providers such as financial information providers, limited local database providers and recreational services providers. The cost of online database production is very high, and if Asia is to develop its own database, it needs to have a copyright policy. Major users of online service are banks and shipping companies.

Hong Kong's IT policy is that the government provides seed money and promotes information trade by consultation but is not directly involved in the information industries. The private sector is left to build the infrastructure of telecom. Hong Kong Telecom Company had the monopoly of domestic voice public switch telephone service until July 1995. Private foreign companies like AT&T and Hutchison are in the market. Hong Kong Telecom International Telecom retains the exclusiveness of providing circuit and basic voice service until the year 2006. However, currently all added value services for international services have been liberalized.

Issues and concerns of information technology in Hong Kong:

There is no national sovereignty issue in Hong Kong, but it needs to figure out how to manage the information technology after 1997.

As networking becomes more and more distributed rather than centralized in the telecom technology, Hong Kong's continuing role of "hubbing", as we know today, will become questionable, and so will be the economic flow that goes with it.

China:

There are three notable economic policy developments in China, they are:

open door policy;

state enterprise reform; and

socialist market economy policy.

The development of information technology in China is closely related to the government's desire of building a close internal information network and to institute national control over local economy. This is manifested in the eight golden projects, in which computer networks are being developed to link tax office, banks, custom units, etc.

There is a plan for massive expansion of telecommunication infrastructure in China to build up mobile system, and fiber optical cables. Telephone networks are set up in major cities, with a target of adding 50 million lines in 1995 and eventually 130 million lines by the year 2000. China is building annually 3 times of the entire Hong Kong's telephone network. Internet is exploding, estimated 100,000 Internet users, mostly in the research community. China has only 3 or 4 Internet providers, and only 10 to 12 online databases with very primitive searching capabilities.

The problem of China's IT lies on the demand side. Although no market research has been done but there is not a high demand of information technology in general household, nor in public offices. In fact there is a genuine concern that technology may create unemployment. Mobile communications do not have high demand in China, but has potential in the future.

In principle, China does not allow foreign management, but accepts value added services with Chinese partnership. Although China can manufacture materials and equipment of telecom industry, hi-tech areas such ATM switching and transmission still need foreign technology.

Taiwan:
By William Zarit
Commercial Officer at American Institute in Taiwan

Taiwan is a democratic society and has a very healthy economy with 6.5% GDP growth, very low inflation rate and zero unemployment.

Computer Industry:
Taiwan's production of computer hardware ranks number four in the world in 1994, and is predicted to move up to be number three in 1995, surpassing Germany. Taiwan is the world's leader in the production of monitors, motherboards, image scanners, mice and keyboards.

Current trend of computer hardware industry is moving from small companies to large dominant companies with a strong and increasing trend of migrating manufactures off shore and concentrating on the high tech industries. Computer software industry is far behind in both production and export, but has a projected 20% growth. The Taiwan government has recently established Nankang Software Park and has potential market of development Chinese software for Chinese speaking communities world-wide.

Telecom:
Taiwan has 2 million pager users and 790,000 cellular lines, and has launched Integrated Services Digital Networks (ISDN) services in four major cities.

Taiwan is in the process of liberalizing its telecommunications. A draft proposal of telecommunication law is currently pending in the Legislature Yuan, and has a good chance to pass. The key to this proposal is allowing foreign investment in all value added services, in wireless services, and in phasing services.

Meanwhile, Taiwan has already opened up 10 value added services to private companies for domestic competition. CE-2, pager, VSAT, and cellular technologies have been liberalized. Cable TV has been a very well developed industry in Taiwan for 20 years. According to the 1993 cable TV law, every cable network on the island will be retrofitted or completely redone, making Taiwan one of the most advanced cable networks in the region.

National Information Infrastructure (NII):Taiwan began its ten-year NII plan in the summer of 1994 with the goal to provide better education and health services, to push computer hardware industry and to pull Taiwan software industry for domestic development. Money has been earmarked for the Plan. Spectrum planning is going forward, technology tends to be cellular and radio paging, and one hundred percent of the spectrum are fiber optics. The artilleries of Taiwan NII are Internet and fiber optic backbone. There are estimated 100,000 Internet users, mostly in the academics. HiNet is a dedicated line for Internet services and is very congested.

Experimental HiNet band width networks are used in two projects. One project is running in the Hsinchu Scientific Industry Park where research institutes, administrative offices, universities and private companies will be networked. The project uses the ATM switches developed domestically. The second project will be focusing on distance education, health care sector and video on demand, and will be in Taipei. Three fourths of Taipei band width are hooked up by libraries.

Korea
Presented by Eui Koh
Asia Pacific Relations, INTELSAT

Liberalization:
There are 133 public enterprises in Korea. The government is going through deregulating and trying to sell government utility companies to private companies. Korea Telecom had the monopoly for a long time until ten years ago when the government created a second and now building a third carrier. There are two mobile companies and 40 cable television companies.

Korea telecommunications profile:
Korea has very high teledensity (42.6 per 100 people ), and switching digitization (59% of the lines are switched to digital). Cellular subscribers grow annually 57.4% in Seoul. Paging is very popular, CT2 services are introduced in 1995 and PCS will be introduced by 1996.

Korea's National Information Infrastructure:
Korea is developing her own NII very quickly, the government proposes the establishment of Asian Pacific Information Infrastructure (APII) and wants to become the leader of APII. Korea's NII has a strong support from the government, with a budget allocation about 5 times higher than the Taiwan government. At present 95% of the country is covered by fiber optic lines.

Import and export of telecommunications equipment:
Korea has a strong foreign trade, 96 billion exports and 102 billion import. Electronics industry is booming, and has become a major industry in Korea. Within the electronics, semiconductor industry is the fast growing industry. The number of electronics companies grew from 496 in 1970 to 8,000 in 1993. Semiconductor and computer are the leading exports from Korea. Korea also imports very high volume of telecommunication parts and equipment from United States and European countries.

Thailand is giving priority to information and communications industry and the government is committed to privatize state enterprises, and liberate financial services by the year 2000. A master plan for communication is brought up by the Ministry of Transportation to the Cabinet for adoption. The Plan calls for further liberation of telecommunication industry, and massive expansion of telephone lines in several phases. According to the Plan, the state owns Telecommunication of Thailand (TOT) for domestic communications, and Communications Authority of Thailand (CAT) for international phone service will be privatized by the year 1998. Private sector will have opportunities to bid the contract for building more than 6 million phone lines.

Computer and mobiles are popular in Thailand. There are three commercial Internet providers. Government employees are required to learn computer skills for promotion. Computer associations work together to donate computers to schools in remote areas. Software industry is booming, representing over 60% growth in 1994-95. The government has issued a copyright law to agree with APEC requirements and is reinforcing the law with the assistance of police department against software pirating. Qualified human resources in the IT field, including university faculty, are in high demand. Salaries for electronic or communication engineers are very good.

Thailand's CAT company has fiber optical lines connected with ASEAN countries through a number of cable networks and uses satellite services such as IntelSat, Asiasat, Palapa, and Globalstar. Thailand recently developed multichannel distribution system for the first time. More than 50,000 units are up in Bangkok this year, and 100,000 units will be expected in the next year. Thaikom has built many services for tele-education, and for commercial social messages as well. Video-on-demand are delivered to homes by fiber optic cables. Current projects for IT development include: Integrated Services Digital Network (ISDN), Metropolitan Area Network, EDI, and ATM.

Vietnam:

It is very difficult to obtain telecommunication information about Vietnam because it has a closed government.

Australia in 1986/87 first offered to set up satellite communication lines in Vietnam. Since then, there are six stations in the country. Vietnam's current teledensity is one telephone to 6,000 people and has a project targeting for teledensity of one to 100 people in 1995. Vietnam could leapfrog to total digital without going through the analog technology.

Since Vietnam opened up in 1987, many countries rushed to invest in telecommunications in Vietnam. The first ones were Japan, Korea (offering digital switching), and France, and then United States, Australia, and Germany. It is very difficult to break the government bureaucracy and to make the right contact to establish business in Vietnam.

Malaysia:
Malaysia has a strong economy growth and its telecommunication industry has a faster growth rate than its GDP. Indeed, its telecommunication industry has become the most important industry in Malaysia.

Malaysia tries to attain the leading position of the ASEAN countries. President Dr. Mahtia is proposing the formation of AFTA, and Malaysia is collaborating with other ASEAN countries to develop a regional telecom infrastructure.

Malaysia was the pioneer in liberalization when the Post Telephone Telecommunication Authority (PTTA) was privatized in 1990, and called Telekom Malaysia. It thus became a model followed by Singapore, Thailand, Indonesia, and India. Since then the cellular market exploded. Seventy percent of the country's transmission system and 78% of the switches are using digital technology. Malaysia plans to launch a state-of-the-art satellite by the end of 1995. The satellite will have 14 Ku Band and C band signals. Currently 64% of the Malaysian international circuits are supported by satellite communication, and thus enable Malaysia to reach not just the ASEAN countries but the whole APEC community. They expect to recover the satellite cost by leasing the transponders with a charge.

Like other ASEAN countries, Malaysia has opened up its telecommunication market for foreign investment following liberalization. Malaysia's telecommunication company Sapura has become a major exporter of cellular phone, pay phone, and fax machines of the Asian Pacific region. It also supplies public call offices and retail calls to Vietnam. Malaysia's semiconductor industry has grown rapidly. The industry has changed from traditionally foreign owned to domestically owned and operated. Even the board and chips are domestically produced. Today, Malaysia is the second largest supplier of semiconductor to the US market as well as the world's market.

Singapore:

Singapore, known as "the intelligent island", has been building a master plan called IT 2000 to develop the nation's information infrastructure. It is the first Asian country to build the information superhighway, and is one of the world's most intensive users of fiber optic cables. Singapore Telekom has a program called "Optical Fiber to the Curb", which plans to build fiber connection to every home by the year 2005, and digitize all 28 telephone switches. It has also laid submarine fiber optic cables to link the island to all Asian Pacific countries. Currently, Southeast Asia has a total of 42 underlining cables, making high quality communication activities in the region.

Singapore Telecoms has offered basic rate interface since 1989 and has begun to offer primary rate service for videoconferencing, and visual and voice communication. Singapore also launched a videotex system, known as Teleview.

Singapore Telecoms, being a public sector and with a complete monopoly over IT services until Dec. 1993, has bought the most sophisticated technology to make this country an intelligent island. The National Computer Board, a statutory board, launched a computerized tradenet system to document trading activities in Singapore's busy harbor. Singapore's telecommunication traffic, value-added services, and mobile services are growing. 27% of Singapore citizens have pagers.

Singapore makes international investment in telecommunication technology, and has shares in the telecom markets in Norway, the United Kingdom, India, Sri Lanka, Taiwan and the Philippines. It has a vision of its future investment in the Chinese telecommunication market.

Indonesia:

Indonesia's two statutory telecommunication agencies are liberalized and open for foreign investment. Current teledensity is less than 2%. Indonesia is planning to build 5 million new phone lines by the year 1999, a remarkable increase as compared to the current 2.2 million lines. AT&T and Nippon Electronic Corporation (NEC) have already won the contract.

Indonesia is the first Third World country to have a domestically owned and operated satellite system, called Palapa Satellite, which was launched in 1976. Indonesia initially used the system to promote national language, integrate diverse population, and provide distance learning programs for farmers and universities.

Other Asian countries followed the ideas and began to lease transponders or rent channels on the Palapa satellite for their own domestic communications. The profits have helped the continued development and operation of Palapa satellite. Major satellite operators in Indonesia include Inmasat, Asiasat, and Indosat.

Indonesia plans to use a mobile satellite called Galupa satellite for cellular communication, and is entering contract with foreign investment on a "build, operate and transfer" (BOT) basis in the construction of new phone lines. Indonesia Telekom is also about to launch a new cellular technology using GSN standard, a digital technology to provide higher volume of voice and data. Rural areas are using cellular/pagers because of the low telephone density. In the cellular telecommunication arena, the big system of low-earth orbiting (LEO) satellites is being launched. LEO will support PCS and PNC services. Malaysia and Singapore and Indonesia have all invested in Inmasat, wanting to move forward to the latest technology in information. When the big LEO system becomes operative, cellular rolling will become a reality, and rural and remote areas can participate in the information revolution.

Future prospects

Asia telecommunication industry has leapfrogged into the 21st century. Many countries have installed the most advanced data switches, fiber optic cables, and wireless network, and are investing in multitechnology at a rapid speed. Even the low income countries are bringing their information infrastructure into the 21st century without being left in the 20th. A country like Vietnam with very low teledensity is selling cellular phone and building Internet facility. The building of information infrastructure is perceived essential for national economic growth and attracting foreign investment. Asian countries installed 23 billion dollars worth telecommunication equipment in 1994, and most of the investment came from foreign investment. It is a big market opportunity. AT&T has already bid 5 year switching in Indonesia, Taiwan, and Korea. Asian countries are eager for the low-earth orbiting satellite to be operative so that cellular rolling will become a reality and the rural and remote areas will be able to participate in this information revolution.